Last year, I published an article called “Is Your CFO Your Digital Transformation Party Pooper?” following an article from the year before, “Your Digital Transformation Won’t Be Executed In A Presentation.” Both these articles are still valid and hold their weight, but here I’d like to explore the ROI of peace of mind when it comes to technology investments.
I am not a CPA or chartered accountant. I did not take finance in school and certainly don’t love doing my taxes, personal or corporate. I am fully dependent on the finance team that is empowered to run our company’s books, across all geographies and locations. They, like many other finance team members, are sharp, organized and on the ball.
The other day, I was flipping through one of the finance team’s CPA (Certified Public Accountant) textbooks. The cases in the book were accurate and there were good examples to draw on for learning. First, I was surprised just how much I had come to master. As an engineer, I do more accounting than anything else, or any role, within our organization, as most CEOs must. But when I closed the book, feeling confident, it came to me. Something very obvious was missing: Finance books often don’t cover intangible assets and opportunities. There is no value, or calculation to create the value, placed on peace of mind and collaboration.
I was reminded of this quote from Jacques Attali, author of Une brève histoire de l’avenir (A Brief History of the Future): “We always come back to the idea of time, therefore of death, so that’s the main thread, it’s time management.”
The ROI Of Peace Of Mind
My wife finds it annoying that whenever we rent a car, I take all the insurance. When I say all of it, I mean it. Yes, I am aware my credit card has insurance. Yes, I am aware I don’t need all the insurance offered. I take all the insurance for peace of mind. When I have five children waiting for me to return the car and head to the airport terminal, I can just drop off the keys and walk away. If there is an issue, I don’t need to do anything because there are no claims to make, no follow up and no headaches.
Did I waste money in the past? No, every dollar spent on the insurance was worth the peace of mind and the time savings in the future.
Peace Of Mind For Your Organization
In the morning, I grab my tea and check on the stats of the team. What happened overnight at our offices in far-away places? Did the business development team close that deal they planned? How many leads did marketing generate? Is the professional services team sharing the workload? Before I even start my day, I already have all the information needed to know my priorities of the day as CEO and office fireman.
The challenge is when operators go to the finance team to lobby for investment in a new platform for the team and if there is no tangible ROI to share, the operators cannot justify the decision to make the investment. So the status quo, chasing information and people, perpetuates.
Want to know the ROI of tech investments for your team? During the week, take note of how many questions and meetings you have to have to simply get information that is owned by one person. How many times did your team make a mistake because something was not clear? How often are you playing coach to unhappy team members? If the answer is more than one hour per day, I’d say you need to invest.
In the heat of the moment, under pressure, businesses will try to fill in the gap created by a lack of tools and vision, by putting together more people and spreadsheets. While this creates the illusion of solving the problem, in the process, it only creates inefficiencies. If you want to quantify the ROI, it is the sum of three: time wasted with people looking at these spreadsheets (their and your time), the time you waste running around chasing information, and last but most important, the cost of all the bad decisions made while you did not have the correct information available. Three examples of the common “bad decisions” are:
• Did you overstaff? Or wait too long to post a job opening that would have made your project profitable or successful?
• Did you really need to have a fire sale? Or was your inventory turnover just fine?
• Could you have anticipated the effect of your last product recall that was hopefully made on the right customers?
These are the questions your CFO should keep in mind the next time they are resistant to digital transformation initiatives for your organization. Just like a serious CEO has an assistant to help manage the calendar, you should also have the information, KPIs and metrics available to you with your morning coffee.
In A Nutshell
Not having to run for information is worth something big.